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Impact of Structural Adjustment and Adoption of Technology on Competitiveness of Major Cocoa Producing Countries

OECD Development Centre Working Papers

The OECD Development Centre links OECD members with developing and emerging economies and fosters debate and discussion to seek creative policy solutions to emerging global issues and development challenges. This series of working papers is intended to disseminate the OECD Development Centre’s research findings rapidly among specialists in the field concerned. These papers are generally available in the original English or French, with a summary in the other language.

Impact of Structural Adjustment and Adoption of Technology on Competitiveness of Major Cocoa Producing Countries

All the world’s cocoa is grown in developing countries — more than half in West Africa — essentially for export. Except in Brazil, Malaysia and Indonesia, it is grown by smallholders. In the international cocoa market, prices rose steeply in 1977 but have been in almost constant decline since and production surpluses have persisted.

For producers, the impact of the structural adjustment and liberalisation process has been mixed. While prices have remained low on the international market, producers have generally received a higher share of the international market price. On the other hand, input prices have increased and subsidies for fertiliser or improved planting material have either been reduced or eliminated. Under these conditions, poor producers then use even fewer purchased inputs.

Structural adjustment has had a negative impact on cocoa research, particularly in public research institutions in Brazil and in Africa. In Malaysia the situation is different as the ...